Flour Mills of Nigeria (FMN) has announced that it has obtained all the necessary regulatory approvals to acquire a 71.69 per cent stake in Honeywell Flour Mills (HFMP) and another 5.06 per cent stake in HFMP held by First Bank.
The firm stated that it can “confirm the transaction has now been consummated by the parties.”
This new information is contained in a notification dated Friday, April 29, 2022, signed by Joseph Umolu, Flour Mill’s Company Secretary/Director of Legal Services, and sent to the Nigeria Exchange Group.
The press release stated that the acquisition has been approved by all relevant regulators, namely the Federal Competition and Consumer Protection Commission (FCCPC), Nigerian Exchange Limited (NGX), and the Securities and Exchange Commission of Nigeria (SEC).
Flour Mills will be paying N4.2 per share for the 71.69% stake in the Honeywell which translates to a 13.5% premium to the N3.7 closing price reported on Friday on the Nigerian Exchange.
Back Story
The acquisition of the majority stake by FMN was first announced last November, stating that the proposed transaction will combine two businesses with shared goals and create a more ”resilient national champion” in the Nigerian foods industry, ensuring long-term job creation and preservation.
Sources with knowledge of the transaction informed Nairametrics that the deal had been awaiting regulatory approval. According to FMN’s management, the acquisition of HFMP is in line with the company’s 5-year plan, which includes organic and inorganic growth.
They also mentioned that the acquisition supports FMN’s drive to expand into the B2C space, where they see better profitability.
What you should know
The announcement stated that the acquisition will, “bring together two businesses with shared goals to create a more resilient national champion in the Nigerian foods industry.”
Importantly, the press release by FMN also noted that “Given FMN’s parallel negotiation for both stakes (in HFMP and First Bank), culminating in the agreements being executed, the transaction was concluded at N4.20 being the final equity price per share.”
Boye Olusanya, Group Managing Director, FMN said, “we are delighted that approvals have been received and we are all set to begin execution of this landmark transaction that would positively impact Nigeria’s food security architecture and overall competitiveness.
